Song’s Change Shows KORUS FTA’s Hurdle

Song Min-soon, a National Assembly member who is one of the most senior and respected lawmakers in the Democratic Party, was minister of foreign affairs and trade in 2007 when South Korea made its free trade agreement with the United States.

As the deal nears a ratification vote in the assembly, Mr. Song says he’s now against it.
And his explanation for the change shows the difficulty that President Lee Myung-bak and the ruling Grand National Party will have winning a consensus from the DP and other parties for ratification.

Increasingly, it appears that opposition parties want to force the GNP to unilaterally ratify the FTA, meaning passing it without any support from them. Possibly, the opposition parties will resort to the theatrics of boycotting the vote. That happened when the Korea FTA with the European Union was ratified earlier this year and with several other controversial bills in recent years, such as media-industry reform measures in 2009.

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The tactic always prompts media headlines that portray the GNP has “ramming through” legislation and resurrects the image of South Korea’s authoritarian-style politics of yesteryear. The GNP has a majority in the 299-seat parliament and can pass any law over opponents, but on most measures lawmakers try to create some consensus.

Already, GNP leaders, well aware of the political maneuvering that lies ahead, have been pushing their counterparts in the U.S. to ratify the pact soon, so that they can take it up and get it done. They hope that Korean voters by next April will be happier paying cheaper prices for U.S. imports than remembering the messy process that made it happen.

Courtesy

Song Min-soon, National Assembly member, former foreign minister

Mr. Song says his opposition to the U.S. FTA isn’t rooted in such tactics and that he’s not trying to back the Lee government and the GNP up against the wall. “I’m trying to push them through a very small opening,” he said in an interview at his office Monday afternoon.

Mr. Song says he’s upset that South Korea agreed to additional negotiations sought by the U.S. last year to change some of the provisions related to the automobile industry. The problem isn’t the changes themselves, since they’ll do little to affect South Korea’s trade surplus of autos, but the perception that the changes tilted the deal towards the U.S.

“We made a deal. The deal should be served,” Mr. Song says. “But this was not served by the U.S. side. Now, we have to make a proportionate change.”

He says that South Korea should try to change the financial services portion of the pact to ensure that, should another financial crisis spur an outflow of capital as happened in 2008, Seoul has a full arsenal of measures to counter-act the effects.

As it stands now, Mr. Song says, the FTA may put some practical limits on measures South Korea may want to use to prevent an outflow of capital and a related weakening of the Korean won. To be sure, he says, it’s a fine line because the FTA does not “theoretically” stop South Korea from doing what it needs to do to protect the won. “But practically, it’s almost prevented,” he says.

“My present view is while the Seoul government accommodated the need of the U.S. administration’s protection of the American automobile industry, the United States should have accommodated South Korea’s not present need but futuristic need for practical leverage to invoke some [capital] safeguards,” Mr. Song says.

If it seems a thin reed on which to oppose a deal he initially helped create, consider the environment Mr. Song is operating in. Many members of the DP (then called the Uri Party) opposed negotiating an FTA with the U.S. back in 2006 and 2007, but Mr. Song and President Roh Moo-hyun pressed forward.

And throughout the talks, left-wing politicians and many in South Korea’s media framed the pact not for what it was – a genuine effort to spur the economy by lowering outdated trade barriers – but as a kind of competition between the U.S. and South Korea that South Korea was likely to lose. Indeed, whenever the trade talks were held in Seoul, South Korea’s TV networks set up anchor booths outside of the hotels and conference centers where they happened, covering the negotiations as if they were a sports event.

Mr. Song balanced a pencil on a coffee cup as he described the balance reached in the initial deal. And he noted that the Democratic Party in early 2008 issued a statement that it was ready to support the trade pact as it then stood.

“There are some people who are traditionally opposed to FTAs. I do not agree with this traditional opposition,” Mr. Song says. “On balance, I’m a supporter of the Korea-U.S. FTA, but now I oppose these details.”

Mr. Song remains one of South Korea’s most recognizable figures on the international scene. On Tuesday, Mr. Song left Seoul for London where he’ll participate in this week’s Global Zero Summit. The annual meeting brings together several hundred political and civic leaders of all political stripes who are trying to top the spread of nuclear weapons, secure all nuclear materials and eventually eliminate nuclear weapons, a goal called global zero.

On other issues, Mr. Song said that Mr. Lee’s North Korea policy is likely to become a big issue in next year’s elections. He said he believes that South Korea and its main ally, the United States, have gone too far with tactics that have isolated North Korea’s authoritarian regime and pushed it closer to Beijing.

He thinks the Democratic Party will propose alternatives next year, but he added they haven’t settled on a direction. “People like me propose we have to denounce the human rights situation in North Korea publicly,” he said. “Some people oppose that. Some people support it. So there is a debate going on.”

As we talked about broader economic issues, Mr. Song noted the difficulty that South Korean presidents have building consensus and how they tend to rush on some projects – in Mr. Lee’s case, he noted, the four rivers project – to get something done because the next president is unlikely to follow through an idea started by the previous administration.

That led to the topic of reforming South Korea’s constitution to permit presidential re-elections. “I think we need it. We need the constitutional change. Just one five-year term is out of date. It’s an obsolete system,” he said. “Anyone who comes to power as president is impatient to achieve something in five years that cannot be erased.”

Such a change might also help re-shape and moderate South Korea’s approach to North Korea. Mr. Song noted that, as next year’s election rolls around, opposition parties can’t just propose swinging back to the so-called “Sunshine Policy” of President Roh and his predecessor Kim Dae-jung.

“I think this pendulum swayed too much from the sunshine policy on the left to this government, which is too extreme to the right,” Mr. Song says. “So this is another bad by-product of this single five-year [presidential] term.”